Will the Court Accept Doval’s Defamation Charge Against Caravan?

On Friday, 22 February, Additional Chief Metropolitan Magistrate Samar Vishal completed recording the statements of witnesses supporting Vivek Doval’s criminal defamation complaint against The Caravan. He will announce his verdict on whether or not the case should proceed to trial on 2 March.

The Patiala House court judge had taken cognisance of Doval’s complaint earlier this month, and now needs to assess the complaint and supporting evidence to see if there are any valid grounds to initiate an investigation and trial.

Vivek Doval (the younger son of NSA Ajit Doval) has said that he has been “deliberately maligned and defamed” by The Caravan, writer Kaushal Shroff and Congress leader Jairam Ramesh, after the magazine published an article by Shroff titled ‘The D Companies’ on 16 January. His statement was recorded on 30 January.

The article delves into a hedge fund established by Doval which is connected to other companies established by his elder brother Shaurya Doval, and notes that the fund was established 13 days after the Modi government’s decision to demonetise Rs 500 and Rs 1,000 notes across the country. Ramesh organised a press conference the day after the article was published, in which, according to Doval, he reiterated the “baseless and unfounded facts” in the article.

The Caravan article draws attention to the fact that Vivek Doval’s hedge fund, GNY Asia Fund, was established in the Cayman Islands, widely considered a tax haven. This is contrasted with a report co-authored by Ajit Doval in 2011 that, according to The Caravan, “advocates a strict crackdown on tax havens and offshore entities.”

According to Doval’s complaint, the way in which the article was written and shared on social media, and then propagated at Jairam Ramesh’s press conference, shows clear mala fide intent to maliciously defame Vivek Doval and his family.

But is there any substance to his claims that the article constitutes criminal defamation?

Was There Anything Illegal About Vivek Doval’s Hedge Fund?

The short (and complete) answer to this question is: no.

There is nothing illegal about incorporating an offshore entity, even a hedge fund in the Cayman Islands, provided all necessary domestic and international regulations are complied with. In his defamation complaint, Doval has gone to great lengths to explain the process behind setting up the hedge fund, and he has said that during the limited time the fund operated in India, it complied with relevant RBI regulations.

The thing is, The Caravan has not at any point alleged any illegality in the manner in which GNY Asia Fund operated, and has not alleged that it violated any regulations. Nor does it make any claims of impropriety by Doval or his fund. It does note the connections of some of the people involved in the hedge fund to the Panama Papers and Paradise Papers (which delved into the opaque world of offshoring), and it does note that it is surprising that GNY Asia was invited to be part of an investors’ conclave hosted by the Edelweiss Group in 2017, despite having significantly lower assets than other companies present at the conference.

But apart from that, it does not really even speculate on anything the fund does. There is a discussion on how FDI inflows from the Cayman Islands into India shot up in 2017 and 2018 by drastic numbers, but this is not linked to GNY Asia at any time.

Vivek Doval’s complaint takes umbrage at the tone of the article – which he argues is meant to create a negative perception from the outset by titling the article “The D Companies”, a term which is linked in public perception to Dawood Ibrahim’s gang. The complaint also notes that it has mentioned the Panama Papers/Paradise Papers links without any context.

The main issue taken by him with the article, however, is the fact that it mentions that the fund was set up soon after demonetisation – even though, as he explains, it takes time to set up such a fund, and the process for this was initiated well before demonetisation. In his complaint, Doval says that

“While there may be no explicit allegation so worded or phrased, to that extent, a number of questions to that effect have been raised, insinuating and imputing such wrongdoings, which leaves the public with a certain negative perception of the actions of the Complainant and his family members, which perception was the anticipated and calculated reaction that the very questions, insinuations and imputations were aimed at.”

Was the Article Defamatory?

It is important to note that just because a statement doesn’t make a direct allegation, this doesn’t mean it can’t be defamatory. It is also important to note that even if a statement is entirely truthful, it could still constitute criminal defamation under Section 499 of the Indian Penal Code. The First Exception to this provision, which deals with truth as a defence to defamation, requires the statement to be made for the “public good”.

Having said that, it is still difficult to see how the article published by The Caravan was defamatory.

Doval claims that he and his company have suffered a loss of reputation, for proof of which he points to “oral and telephonic inquiries from a large number of persons” after the article and press conference, and that these persons have shown “dismay” and “anguish” over what this shows. Whether or not it is true that his reputation has been lowered (which must be proved to establish defamation) is a matter for the court to decide based on evidence such as the witness statements being recorded on 30 January. However, even if Doval can successfully prove loss of reputation, if any of the exceptions to defamation apply, then the article cannot be considered defamatory.

No Allegations or Opinions

As mentioned earlier, The Caravan article doesn’t allege any illegal or improper behaviour by Doval, his fund, or his family members. There is nothing in the article to suggest that the fund is engaged in money laundering, and even the reference to the fact the fund was established soon after demonetisation is fleeting at best. The article steers clear of any opinion, only presenting the facts available, and pretty much leaves it at that.

Because it doesn’t express any opinions per se, the relevant exception for The Caravan and author Kaushal Shroff is the First Exception – that the statements in the article are true, and are made for the public good. Doval’s complaint says that these are “far from truth,” but doesn’t rebut these, only provides context and explanation for what the article says.

Public Good?

In the absence of any rebuttal, the only question that remains is whether or not there is any public good in publishing this information about Doval’s fund. This is again a question of fact for the court to assess, but there are pretty reasonable grounds to say that there is a public good in this case. After all, Ajit Doval is the National Security Advisor, an important public position, and so it is only natural that there will be some scrutiny of his affairs and those of his family.

This must not be intrusive or violative of the right to privacy, of course, but looking at publicly available information about the business affairs of his children cannot really be classified as such. It should also be noted that Ajit Doval isn’t just any public figure, but has (a) taken a public stance on offshore entities before and (b) has been involved in high-profile public issues like the Rafale deal and the Alok Verma controversy.

Analysing whether or not there has been a conflict of interest in any way relating to such a public figure (remember that conflict of interest assessments always look at family members) is important in a democracy, and even if there is no conflict of interest or impropriety, the public needs to have information about the dealings of them and their families.

Reckless Insinuations?

Of course, any reporting on such issues should not be salacious or written in such a way as to imply that there is something wrong (unless there if some proof of this). But again, The Caravan article does not do anything of the sort. Perhaps the headline is in poor taste, but there is not a hint of a connection in any of the teasers or the main body of the article that there is any connection between the Dovals and Dawood Ibrahim.

It is perhaps understandable that Vivek Doval is unhappy that his dealings are mentioned in the same space as references to the Panama/Paradise Papers and demonetisation, but these are merely facts. One may not believe that there was a need to write this piece, especially since there is no actual allegation of illegality, but presenting these facts falls squarely within freedom of speech.

Even if the article is considered to be presenting more than just facts, to be presenting insinuations of wrongdoing, this would fall within the good faith exceptions in Section 499, which apply when it comes to public questions. Yes, running and investing in offshore funds is not illegal, but there is a global debate to be had over such operations, and presenting information about this cannot be considered in bad faith.

Doval has argued that the article was not in good faith since the article was published without intensive efforts by the author and magazine to get his view of the events. A questionnaire was sent by email and Facebook messenger to him and his brother and others on 12 January 2019, four days before the publication of the article. This was more than enough time for them to give their side of the story – just because they would have liked more time doesn’t mean it had to be given to them. After all, it is often commonplace for only 24 hours to be given to respond to questions (depending on the story), and since no allegations of illegality were made, Shroff and The Caravan could reasonably go ahead with the article without receiving a response.

What About Jairam Ramesh’s Press Conference? And is There A Better Option for Doval to Protect His Reputation?

The analysis above is restricted to the article in The Caravan, and whether or not the magazine and the author have committed defamation. Jairam Ramesh’s statements and press conference have not been considered, since these went beyond the mere text of the article. Ramesh will no doubt get excellent legal representation to argue his case, but the bigger question is whether or not such reporting by publications by The Caravan should be thwarted.

Because that is what complaints like Doval’s run the risk of doing. Strategic Lawsuits Against Public Participation (SLAPPs) are a huge problem for journalists worldwide looking to report on the corporate world and politicians. Given India’s regressive criminal defamation laws, SLAPPs in India have even greater power to disturb free speech, since they can take the form of criminal complaints, in addition to massive civil suits (normally filed in Ahmedabad).

That Doval has not yet filed such a civil suit is a good thing, and shows that perhaps he really is just concerned about the damage to his reputation. However, since this is unlikely to succeed, it would perhaps be best for him to drop the complaint, at least against The Caravan and Shroff, and instead look for a more constructive solution to this dispute, such as the inclusion of his explanations in the story, and perhaps a change to the title of the article.

If not, one can only hope the court keeps such considerations in mind and doesn’t just allow the case to proceed to trial without application of mind by the judge.

(This article has been updated to reflect that the witnesses statements are being recorded on 11 February, after Vivek Doval recorded his statement on 30 January.)